|Ludwig Heinrich Edler von Mises|
|Full name||Ludwig Heinrich Edler von Mises|
|Born||September 29, 1881
Lemberg, Austria-Hungary (now Lviv, Ukraine)
|Died||October 10, 1973 (aged 92)
New York City, New York, USA
|Main interests||economics, political economy, philosophy of history, epistemology, rationalism, classical liberalism, libertarianism|
|Notable ideas||praxeology, economic calculation problem, methodological dualism|
|Part of a series on Libertarianism|
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Ludwig Heinrich Edler von Mises (pronounced /ˈluːtvɪç fɔn ˈmiːzəs/) (September 29, 1881 – October 10, 1973) was an Austrian economist, philosopher, author and classical liberal who had a significant influence on the modern libertarian movement and the Austrian School.
Ludwig von Mises was born in the city of Lemberg, in Galicia, Austria-Hungary (now in Ukraine), to parents Arthur Edler von Mises from a recently ennobled Jewish family involved in building and financing railroads, and Adele von Mises (née Landau), the niece of Dr. Joachim Landau, a Liberal Party deputy to the Austrian Parliament. Arthur was stationed there as a construction engineer with Czernowitz railroad company. At the age of twelve Ludwig spoke fluent German, Polish, and French, read Latin, and could understand Ukrainian. Mises had two younger brothers: applied physicist Richard von Mises, a member of the famous Vienna Circle, and later Karl von Mises, who died in infancy from scarlet fever. When Ludwig and Richard were children, his family moved back to their ancestral home of Vienna.
In the years from 1904 to 1914, Mises attended lectures given by the prominent Austrian economist Eugen von Böhm-Bawerk. There, he developed friendships not only with Menger and Böhm-Bawerk, but also prominent sociologist Max Weber. Mises taught as a Privatdozent at the Vienna University in the years from 1913 to 1934 while formally serving as secretary at the Vienna Chamber of Commerce from 1909 to 1934. In these roles, he became one of the closest economic advisers of Engelbert Dollfuss, and, later, Otto von Habsburg. Friends and students of Mises in Europe included Wilhelm Röpke and Alfred Müller-Armack (influential advisors to German chancellor Ludwig Erhard), Jacques Rueff (monetary advisor to Charles de Gaulle), Lord Lionel Robbins (of the London School of Economics), and President of Italy, Luigi Einaudi.
Economist and political theorist F. A. Hayek first came to know Mises while working as Mises' subordinate at a government office dealing with Austria's post-World War I debt. Hayek wrote, "there I came to know him mainly as a tremendously efficient executive, the kind of man who, as was said of John Stuart Mill, because he does a normal day's work in two hours, always has a clear desk and time to talk about anything. I came to know him as one of the best educated and informed men I have ever known..." It was Hayek's development of Mises' innovative theoretical work on the business cycle which later earned him the Nobel Prize in economics.
In 1934, Mises left Austria for Geneva, Switzerland, where he was a professor at the Graduate Institute of International Studies until 1940. Fearing the prospect of Germany taking control over Switzerland, in 1940 Mises with other Jewish refugees left Europe and emigrated to New York City. There he became a visiting professor at New York University, from 1945 until his retirement in 1969, though he was not salaried by the university. Instead, he earned his living from funding by businessmen such as Lawrence Fertig. For part of this period, Mises worked on currency issues for the Pan-Europa movement led by a fellow NYU faculty member and Austrian exile, Richard Coudenhove-Kalergi. In 1947, Mises became one of the founding members of the Mont Pelerin Society.
In America, Mises' work first influenced that of economists such as Benjamin Anderson, Leonard Read and Henry Hazlitt, but also writers such as former radical Max Eastman, who threw a party for Mises in order to celebrate the publication of his treatise Human Action. In addition, novelist Ayn Rand was among those who attended his New York City seminar. His American students included Israel Kirzner, Hans Sennholz, Ralph Raico, Leonard Liggio, George Reisman and Murray Rothbard. Mises later received an honorary doctorate from Grove City College.
Despite his growing fame, Mises listed himself plainly in the New York phone directory and welcomed students into his home. He retired from teaching at the age of 87, then, the oldest active professor in America. Mises died at the age of 92 at St. Vincent's hospital in New York.
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Mises wrote and lectured extensively on behalf of classical liberalism and is seen as one of the leaders of the Austrian School of economics. In his treatise on economics, Human Action, Mises introduced praxeology as a more general conceptual foundation of the social sciences and established that economic laws were only arrived at through the means of methodological individualism firmly rejecting positivism and materialism as a foundation for the social sciences. Many of his works, including Human Action, were on two related economic themes:
Mises argued that money is demanded for its usefulness in purchasing other goods, rather than for its own sake and that any unsound credit expansion causes business cycles. His other notable contribution was his argument that socialism must fail economically because of the economic calculation problem – the impossibility of a socialist government being able to make the economic calculations required to organize a complex economy. Mises projected that without a market economy there would be no functional price system, which he held essential for achieving rational and efficient allocation of capital goods to their most productive uses. Socialism would fail as demand cannot be known without prices, according to Mises. Mises' criticism of socialist paths of economic development is well-known, such as in his 1922 work Socialism: An Economic and Sociological Analysis:
The only certain fact about Russian affairs under the Soviet regime with regard to which all people agree is: that the standard of living of the Russian masses is much lower than that of the masses in the country which is universally considered as the paragon of capitalism, the United States of America. If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism.
In Interventionism, An Economic Analysis (1940), Ludwig von Mises wrote:
The usual terminology of political language is stupid. What is 'left' and what is 'right'? Why should Hitler be 'right' and Stalin, his temporary friend, be 'left'? Who is 'reactionary' and who is 'progressive'? Reaction against an unwise policy is not to be condemned. And progress towards chaos is not to be commended. Nothing should find acceptance just because it is new, radical, and fashionable. 'Orthodoxy' is not an evil if the doctrine on which the 'orthodox' stand is sound. Who is anti-labor, those who want to lower labor to the Russian level, or those who want for labor the capitalistic standard of the United States? Who is 'nationalist,' those who want to bring their nation under the heel of the Nazis, or those who want to preserve its independence?
Robert Heilbroner opined after the fall of the Soviet Union, that "It turns out, of course, that Mises was right" about the impossibility of socialism. "Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that's hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments."
Milton Friedman considered Mises intolerant in his personal behavior:
The story I remember best happened at the initial Mont Pelerin meeting when he got up and said, "You're all a bunch of socialists." We were discussing the distribution of income, and whether you should have progressive income taxes. Some of the people there were expressing the view that there could be a justification for it.
Another occasion which is equally telling: Fritz Machlup was a student of Mises's, one of his most faithful disciples. At one of the Mont Pelerin meetings, Fritz gave a talk in which I think he questioned the idea of a gold standard; he came out in favor of floating exchange rates. Mises was so mad he wouldn't speak to him for three years. Some people had to come around and bring them together again. It's hard to understand; you can get some understanding of it by taking into account how people like Mises were persecuted in their lives.
In a 1957 review of his book, The Anti-Capitalistic Mentality, The Economist said of von Mises: "Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard."
In a 1978 interview Friedrich Hayek said about his book Socialism: "At first we all felt he was frightfully exaggerating and even offensive in tone. You see, he hurt all our deepest feelings, but gradually he won us around, although for a long time I had to -- I just learned he was usually right in his conclusions, but I was not completely satisfied with his argument."
"[Socialists] promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office.”"
"All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out."
"As the science of economics...exploded the fallacies of every brand of utopianism, it was outlawed and stigmatized as unscientific."
"It is not conclusive proof of a doctrine's correctness that its adversaries use the police, the hangman, and violent mobs to fight it. But it is a proof of the fact that those taking recourse to violent oppression are in their subconsciousness convinced of the untenability of their own doctrines."
"The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders."
"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."
"What counts alone is the innovator, the dissenter, the harbinger of things unheard of, the man who rejects the traditional standards and aims at substituting new values and ideas for old ones."
"The first thing a genius needs is to breath free air."
"The aim of all struggles for liberty is to keep in bounds the armed defenders of peace, the governors and their constables. The political concept of the individual's freedom means: freedom from arbitrary action on the part of the police power."
"People do not cooperate under the division of labor because they love or should love one another. They cooperate because this best serves their own interests. Neither love nor charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict."
"Society is joint action and cooperation in which each participant sees the other partner's success as a means for the attainment of his own."
"Business is a means- the only means- to increase the quantity of goods available for preserving life and rendering it more agreeable."
"The essence of democracy is not that everyone makes and administers laws but that lawgivers and rulers should be dependent on the people's will in such a way that they may be peaceably changed if conflict occurs."
"Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow..."
"The rich adopt novelties and become accustomed to their use. This sets a fashion which others imitate. Once the richer classes have adopted a certain way of living, producers have an incentive to improve the methods of manufacture so that soon it is possible for the poorer classes to follow suit. Thus luxury furthers progress. Innovation "is the whim of an elite before it becomes a need of the public. The luxury today is the necessity of tomorrow." Luxury is the roadmaker of progress: it develops latent needs and makes people discontented. In so far as they think consistently, moralists who condemn luxury must recommend the comparatively desireless existence of the wild life roaming in the woods as the ultimate ideal of civilized life."
"...it is solely bigness in business which makes it possible to supply the masses with all those products the present-day American common man does not want to do without. Luxury goods for the few can be produced in small shops. Luxury goods for the many require big business."
"For the sake of domestic peace, liberalism aims at democratic government. Democracy is therefore not a revolutionary institution. On the contrary it is the very means of preventing revolution and civil wars. It provides a method for the peaceful adjustment of government to the will of the majority."
"Action based on reason, action therefore which is only to be understood by reason, knows only one end, the greatest pleasure of the acting individual."
"Reason is the main resource of man in his struggle for survival."
"If history could teach us anything, it would be that private property is inextricably linked with civilization."
"The worst evils which mankind has ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster."
"What pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you."
"The uncouth hordes of common men are not fit to recognize duly the merits of those who eclipse their own wretchedness."
"A nation's policy form an integral whole. Foreign policy and domestic policy are closely linked together; they are but one system; they condition each other."
"Whoever prefers life to death, happiness to suffering, well-being to misery must defend without compromise private ownership in the means of production."